Interior Secretary Doug Burgum called the legislation a turning point in federal resource management:
“This marks a significant shift in how we manage our public lands, support energy development and work with local communities. The Department is proud to implement President Trump’s agenda and get the federal government back to working for the American people.”
One of the most significant changes involves the reduction of federal royalty rates. Offshore oil and gas production will now be subject to a lower rate—between 12.5% and 16.67%—compared to the 16.67% minimum previously set by the Inflation Reduction Act. The Bureau of Ocean Energy Management is now mandated to hold at least two offshore lease sales per year through 2039, with the first scheduled for December 2025. In Alaska, offshore leasing will resume in the Cook Inlet with at least six sales required between 2026 and 2032.
Onshore, the Bureau of Land Management will reinstate quarterly lease sales and reduce the royalty rate for new federal leases back to 12.5%. Permits to drill will be valid for four years, and producers will no longer be required to pay royalties on extracted methane—a provision in the IRA that industry groups had strongly opposed. The act also eliminates the expression of interest fees previously required to nominate land for leasing.
Interior is also streamlining permitting and operations by revising legal definitions around what constitutes “eligible” and “available” lands. The Bureau of Safety and Environmental Enforcement must now approve commingling requests unless clear safety or resource recovery issues exist, a move that could increase production efficiency and reduce costs.
Coal production is also set to expand under the new law. The federal royalty rate has been lowered from 12.5% to 7%, and the Interior Department is now tasked with making four million acres of known coal reserves available for leasing. Coal lease reviews will also be streamlined under the new regulatory framework.
While proponents say the changes will boost domestic energy production and lower costs for American families, environmental groups warn the rollback of climate-related provisions could accelerate emissions and reduce oversight. With rulemaking already underway, the Interior Department’s role in reshaping federal energy policy will remain central to both the administration’s economic message and the country’s long-term sustainability trajectory.
